Correlation Between Inner Mongolia and Shaanxi Beiyuan
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By analyzing existing cross correlation between Inner Mongolia BaoTou and Shaanxi Beiyuan Chemical, you can compare the effects of market volatilities on Inner Mongolia and Shaanxi Beiyuan and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Inner Mongolia with a short position of Shaanxi Beiyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inner Mongolia and Shaanxi Beiyuan.
Diversification Opportunities for Inner Mongolia and Shaanxi Beiyuan
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Inner and Shaanxi is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Inner Mongolia BaoTou and Shaanxi Beiyuan Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Beiyuan Chemical and Inner Mongolia is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Inner Mongolia BaoTou are associated (or correlated) with Shaanxi Beiyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Beiyuan Chemical has no effect on the direction of Inner Mongolia i.e., Inner Mongolia and Shaanxi Beiyuan go up and down completely randomly.
Pair Corralation between Inner Mongolia and Shaanxi Beiyuan
Assuming the 90 days trading horizon Inner Mongolia BaoTou is expected to generate 1.35 times more return on investment than Shaanxi Beiyuan. However, Inner Mongolia is 1.35 times more volatile than Shaanxi Beiyuan Chemical. It trades about 0.02 of its potential returns per unit of risk. Shaanxi Beiyuan Chemical is currently generating about -0.01 per unit of risk. If you would invest 188.00 in Inner Mongolia BaoTou on September 12, 2024 and sell it today you would earn a total of 22.00 from holding Inner Mongolia BaoTou or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inner Mongolia BaoTou vs. Shaanxi Beiyuan Chemical
Performance |
| Timeline |
| Inner Mongolia BaoTou |
| Shaanxi Beiyuan Chemical |
Inner Mongolia and Shaanxi Beiyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inner Mongolia and Shaanxi Beiyuan
The main advantage of trading using opposite Inner Mongolia and Shaanxi Beiyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inner Mongolia position performs unexpectedly, Shaanxi Beiyuan can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Shaanxi Beiyuan will offset losses from the drop in Shaanxi Beiyuan's long position.| Inner Mongolia vs. Kangxin New Materials | Inner Mongolia vs. Cangzhou Mingzhu Plastic | Inner Mongolia vs. Hangzhou Gaoxin Rubber | Inner Mongolia vs. Vontron Technology Co |
| Shaanxi Beiyuan vs. HUAQIN TECHNOLOGY LTD | Shaanxi Beiyuan vs. Jinhe Biotechnology Co | Shaanxi Beiyuan vs. Shaanxi Energy Investment | Shaanxi Beiyuan vs. Zhejiang Construction Investment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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